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Item 1.01.
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Entry into a Material Definitive Agreement.
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Contribution Agreement
On February 17, 2017, in connection with the formation of San Mateo Midstream, LLC (“San Mateo Midstream”), a joint venture with
FP MMP Holdings LLC, a subsidiary of Five Point Capital Partners LLC (“Five Point”), Longwood Midstream Holdings, LLC (“Longwood Holdings”), a wholly-owned subsidiary of Matador Resources Company (“Matador”), entered
into and consummated the transactions (the “Closing”) contemplated by a Subscription and Contribution Agreement (the “Contribution Agreement”), by and among Longwood Holdings, Five Point and San Mateo Midstream.
Pursuant to the terms of the Contribution Agreement, Longwood Holdings made an initial capital contribution to San Mateo Midstream consisting
of (a) all of the outstanding equity interests in Longwood RB Pipeline, LLC (“Longwood RB”), Longwood Wolf Pipeline, LLC (“Longwood Wolf”), Fulcrum Delaware Water Resources, LLC (“Fulcrum”), DLK Black River
Midstream, LLC (“DLK”) and Black River Water Management Company, LLC (“Black River” and, together with Longwood RB, Longwood Wolf, Fulcrum and DLK, the “Contributed Entities”), which Contributed Entities hold
Matador’s midstream assets in the Wolf and Rustler Breaks areas valued at $350.0 million (the “Midstream Assets”) and (b) cash in the amount of $5.1 million, in exchange for 51.0% of the membership interests in San
Mateo Midstream. Also at the Closing, Five Point made an initial capital contribution of cash in the amount of $176.4 million, of which $171.5 million was immediately distributed to Longwood Holdings, partially as a reimbursement of
capital expenditures by Matador and its subsidiaries with respect to the Midstream Assets, in exchange for 49.0% of the membership interests in San Mateo Midstream. In addition to the initial capital contributions, each of Longwood Holdings and Five
Point committed to make additional capital contributions of $71.4 million and $68.6 million, respectively. Within 120 days following the Closing, the initial capital contributions will be subject to customary adjustments based on the net
working capital of the Contributed Entities at the Closing and the net operating income of the Contributed Entities between February 1, 2017 and the Closing.
The Contribution Agreement contains customary representations and warranties and covenants by Longwood Holdings, Five Point and San Mateo
Midstream, including covenants regarding certain tax and confidentiality matters.
The description of the Contribution Agreement set forth
above is qualified in its entirety by reference to the Contribution Agreement, a copy of which is filed as Exhibit 2.1 to this Current Report on Form
8-K
(this “Current Report”) and is incorporated
herein by reference. This summary of the principal terms and the Contribution Agreement have been included to provide security holders with information regarding the terms of the Contribution Agreement. Neither is intended to provide any other
factual information about Matador, Longwood Holdings, Five Point or their respective subsidiaries or affiliates. The representations and warranties and covenants contained in the Contribution Agreement were made solely for purposes of the
Contribution Agreement as of specific dates, were solely for the benefit of the parties to the Contribution Agreement, may be subject to limitations agreed upon by the contracting parties, including being qualified by confidential disclosures made
for the purposes
of allocating contractual risk between the parties to the Contribution Agreement instead of establishing these matters as facts, and may be subject to standards of materiality applicable to the
contracting parties that differ from those applicable to security holders. Security holders are not third-party beneficiaries under the Contribution Agreement and should not rely on the representations, warranties and covenants or any descriptions
thereof as characterizations of the actual state of facts or condition of Matador, Longwood Holdings or Five Point. Moreover, information concerning the subject matter of the representations and warranties may change after the date of the
Contribution Agreement, which subsequent information may or may not be fully reflected in Matador’s public disclosures.
Supplemental Indenture
On February 17, 2017, in connection with the transactions contemplated by the Contribution Agreement (the “Contribution
Transactions”), Matador entered into a Fourth Supplemental Indenture (the “Fourth Supplemental Indenture”) with Wells Fargo Bank, National Association, as trustee (the “Trustee”), which supplements the Indenture, dated as of
April 14, 2015 (as supplemented and amended, the “Indenture”), among Matador, the Guarantors named therein and the Trustee. Pursuant to the Fourth Supplemental Indenture, on February 17, 2017, (i) Longwood Holdings was
designated as a guarantor under the Indenture and (ii) DLK and Black River were released as parties to and as guarantors under the Indenture.
The foregoing description of the Fourth Supplemental Indenture does not purport to be complete and is qualified in its entirety by reference
to the Fourth Supplemental Indenture, which is attached hereto as Exhibit 4.1 and is incorporated herein by reference.